Made-in-India cars for the world

Call it the Nano engineering gold rush. Indian engineering skills are suddenly hot property as global auto companies source competence, along with components, for their next-gen models. Sourcing cheaper components to cut costs for cars sold in India and globally is now de rigeur.

The second wave of sourcing focuses on skills, particularly in small cars where India has a core competence. As world markets move to smaller and less fuel-hungry vehicles, Big Auto is looking to India for scale and expertise. Maruti Suzuki’s soon-to-debut A-Star has some Indian content, which was played up alongside the Nano’s global outing at the Geneva Motor Show this March. But now Suzuki is planning to step on the gas, outsourcing its costly model development to India for the next-gen small cars.

“These cars will be developed in India and made in India for the world,” said a Maruti official. “By 2012, that line-up should start rolling out.” Suzuki is focussing on R&D in a big way in India to crank up its engineering pool for the purpose.

India will be the small car hub not just in terms of manufacturing but also in terms of product development, the ultimate holy grail in Motown. Other global car majors like Hyundai, Honda and GM are working on both ends of this trend-developing small car models that will be accepted in India and other similar markets and using India as a sourcing hub for parts and skills.

Hyundai, which like Maruti has a big local footprint in manufacturing, is now focussing on R&D in India. The Korean company has set up a $40 million computer-aided design centre in Hyderabad. Says Hyundai Motor India chief HS Lheem: “Our future launches, especially for the compact segment, are being developed keeping in mind the potential of the Indian market.”

For GM, the $60-million technical centre in Bangalore will be its powerhouse for developing future technologies and shaping new cars. “We have lined up a design centre, engineering services and an R&D facility at Bangalore. It will conceive future products for India and other emerging markets,” said GM India vice-president P Balendran.